[ by Melanie Gretchen ]

Mr. Hester, like Mr. Pandit, is operating on a 5-year turnaround plan for his firm.  The RBS plan has a 2013 deadline, at which point Mr. Hester's objectives hopefully can be realized.

Before he quit, Mr. Pandit succeeded in fulfilling his firm's plan by restoring the bank to profitability.  This was not a small feat considering its $45 million bailout by the government. 

Mr. Hester may not suffer the same fate as Mr. Pandit on the way out; the sale of a Smith Barney-like entity gone sour is not likely to play out during his time.  Other events of Mr. Hester's leadership play like déjà vu.

Just a few highlights:

• Both Hester and Pandit are former investment bankers who have spent the years since the 2008 crisis struggling to repair outsized, bailed-out universal banks.

• Both have been rejected on remuneration: Citi shareholders rejected Pandit’s pay package. Public pressure made Hester give up his bonuses for 2009, 2011, and the current year, and a long-term incentive awarded in 2009 paid out nothing.

How is Mr. Hester faring?

• His goa, to shrink RBS’s towering £258 billion pile of non-core assets, is nearing completion. 

• Although the RBS deal to sell 316 branches to Santander fell apart, other RBS disposals ordered by the European Commission as penance for state aid - e.g., like the listing of RBS’s retail insurance arm, have gone well.

• Under Hester's leadership, RBS has just exited a costly UK state bad-asset insurance scheme.

It would seem Mr. Hester is set to follow through with his plan to stay until the government starts selling down its 82% stake in RBS, which may not start for another 18 months - or until March 2014 - according to a person familiar with the situation.  However, if he decides to leave once he's completed RBS’s restructuring, the British bank would do better to announce a new CEO sooner than the day-of replacement of Mr. Pandit, and the absence of a COO in the case of Pandit right-hand, former COO John Havens.

[C-I Note:  This analysis is based on personal opinions of Reuters Breakingviews columnist George Hay.  Mr. Hay presents a succinct, yet, comprehensive summary of key issues - particularly those facing RBS CEO Hester.  C-I would just like to add the following comments about Mr. Hester's style or approach to management - having followed his efforts rather closely over the past year. 

It's our opinion that Mr. Hester believes in doing the right thing, and that he takes every opportunity to share this philosophy with his employees.  Notwithstanding the fact that RBS now appears to be getting into the Libor Manipulation issue, Mr. Hester clearly advocates a "Culture of Compliance" that must be initiated at the senior management level.

Kudos to Mr. Hester.  We hope he completes his objectives and receives the credit we believe he is due.  That also goes for receiving the compensation we believe he has earned.  We are impressed that he has, without much hesitation, responded to calls for him to voluntarily not retain bonuses and other performance-driven compensation.  He deserves to receive and retain those benefits that were authorized, and we hope he will have the opportunity to accept these benefits without pressure from those who don't fully understand the nature of the remuneration.]

For further details, go to [Reuters Breakingviews, 10/19/12].